EXHIBIT 4.11
THIS INSTRUMENT WAS PREPARED
BY AND WHEN RECORDED SHOULD
BE RETURNED TO:
Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
SPACE ABOVE LINE FOR RECORDER'S USE
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SUBORDINATION, NON-DISTURBANCE AND
ATTORNMENT AGREEMENT
by and among
KINDRED HEALTHCARE, INC.
and KINDRED HEALTHCARE OPERATING, INC.,
collectively, Tenant,
VENTAS FINANCE I, LLC,
Landlord
and
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE LENDING, INC.,
Lender
covering premises located at:
[_______________________]
[_______________________]
[_______________________]
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT (said
instrument, as the same may be amended, modified or restated, this "Agreement")
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made and entered into as of the 12th day of December, 2001 (the "Effective
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Date"), by and among KINDRED HEALTHCARE, INC., a Delaware corporation (f/k/a
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Vencor, Inc., "Kindred"), KINDRED HEALTHCARE OPERATING, INC., a Delaware
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corporation (f/k/a Vencor Operating, Inc., "Operator"; and together with Kindred
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and their respective permitted successors and assigns, collectively, "Tenant"),
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both having an address at ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, VENTAS
FINANCE I, LLC, a Delaware limited liability company (together with its
successors and assigns, "Landlord") having an address at c/o Ventas, Inc., 4360
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▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, and ▇▇▇▇▇▇▇ ▇▇▇▇▇
MORTGAGE LENDING, INC., a Delaware corporation having an address at c/o Merrill
▇▇▇▇▇ & Co., Four World Financial Center, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (together with its successors and assigns, "Lender").
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Preliminary Statement
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WHEREAS, Landlord is the owner in fee simple of the real property
described on Exhibit A attached hereto, together with the improvements thereon
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(the "Premises").
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WHEREAS, Landlord (as the assignee of Ventas Realty, Limited
Partnership) and Tenant have entered into a certain Master Lease Agreement,
dated as of the Effective Date (as amended, modified or restated, the "Lease")
demising to Tenant certain properties owned in fee by Landlord and the
improvements thereon including the Premises.
WHEREAS, pursuant to a certain Loan and Security Agreement, dated as of
the date hereof (as amended, modified or restated, the "Loan Agreement"), among
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Landlord, as borrower, and Lender, and certain other loan documents, the Lender
has agreed to make a loan (the "Loan") to Landlord as borrower in the original
principal amount of Two Hundred Twenty-Five Million Dollars ($225,000,000.00),
together with interest thereon and other amounts, to be secured by, among other
things, a certain mortgage, deed of trust or deed to secure debt, dated as of
the Effective Date (as amended, modified or restated, the "Mortgage") and a
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certain assignment of leases and rents, dated as of the Effective Date (as
amended, modified or restated, the "Assignment of Leases") encumbering the
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Premises, which Mortgage and Assignment of Leases are to be recorded in the real
estate records of the county where the Premises are located.
WHEREAS, Lender, Landlord and Tenant desire to confirm their
understanding with respect to the Lease and the Loan and the rights of Tenant
and Lender thereunder.
WHEREAS, capitalized terms used but not otherwise defined herein shall
have the respective meanings given thereto in the Lease.
NOW THEREFORE, in consideration for the mutual covenants contained herein
and other consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. Subordination.
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(a) Notwithstanding anything to the contrary set forth in the Lease, but
without limitation of subsection (b) below, the Lease and the rights of Tenant
in, to and under the Lease and the Premises are hereby subjected and
subordinated to the lien of the Mortgage and to any modification, reinstatement,
extension, supplement or consolidation thereof to the full extent of all amounts
secured thereby as well as any advances or readvances of the Loan with interest
thereon and to any mortgages, open-end mortgages, deeds of trust, trust deeds,
deeds to secure debt or credit line deeds of trust on the Premises which may be
hereafter held by Lender as security for the Loan.
(b) Each of Landlord, Tenant and Lender acknowledges and agrees that,
notwithstanding anything to the contrary contained in the Lease or in the Loan
Agreement or other documents evidencing and securing the Loan:
(i) in the case of insurance claims for an amount equal to or
exceeding the Restoration Threshold (as defined in the Loan Agreement)
applicable to the Premises, Tenant and Lender shall participate jointly in the
claim, claim prosecution and settlement process, with Tenant maintaining the
lead role in negotiations with the insurer(s) and Lender having full access to
information, the right to participate in such negotiations and the right to
approve and join in any settlement agreements, proof of loss, loss adjustments
and/or other decisions regarding any such claim or the prosecution or settlement
thereof, which approval and joinder shall not be unreasonably withheld, delayed
or conditioned;
(ii) in the case of insurance claims for an amount less than the
aforesaid Restoration Threshold, Landlord, Lender and Tenant agree that (x)
subject to subsection (y) below, any such claim shall be prosecuted and/or
settled solely by Tenant, and the proceeds of any such claim shall be paid
directly to Tenant to be applied to Restoration of such Premises in accordance
with the terms of the Lease, and shall not be required to be disbursed to
Landlord or Lender, or (y) if an Event of Default (as defined in the Lease) by
Tenant exists, the provisions of subsections (i) and (iv) of this subsection (b)
shall apply;
(iii) in the case of condemnation or eminent domain proceedings or
claims affecting the Premises or any part thereof, the provisions of Sections
6(a) and 6(b) of the Mortgage, as each of such subsections is in effect on the
date of this Agreement and true, correct and complete copies of which have been
delivered by Landlord and Lender to Tenant, shall govern the adjustment and
settlement of any such proceedings or claims and disposition of any condemnation
proceeds, provided that, so long as (1) no Event of Default (as defined in the
Lease) by Tenant with respect to non-payment of Rent (as defined in the Lease)
exists and (2) no other Event of Default (as defined in the Lease) exists for
which Landlord has commenced (or Lender has requested Landlord to commence)
proceedings for termination of the Lease, in whole or in part, or dispossession
or eviction of Lessee from one or more Leased
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Properties (as defined in the Lease), (x) the portion of any condemnation or
eminent domain award to which Tenant is entitled by the terms of Sections
15.6(a)(i) and 15.6(a)(ii) or Section 15.6(b), as applicable, of the Lease shall
be paid to Tenant and (y) the portion of any condemnation or eminent domain
award to which Tenant is entitled by the terms of Section 15.6(a)(iii) of the
Lease shall be held and disbursed by Lender in accordance with the terms and
conditions of Section 6(b) of the Mortgage (and, as provided in subsection (v)
of such Section 6(b) and as further described in subsection 1(b)(iv) of this
Agreement below, Sections 5.5(B), 5.5(C), 5.5(D) and 5.5(E) of the Loan
Agreement), but with the condition referenced in Section 6(b)(i) of the Mortgage
being changed to refer instead to a condition that the applicable condemnation
or taking does not render the Facility at the Leased Property Unsuitable For Its
Primary Intended Use;
(iv) except for insurance proceeds in an amount less than the
Restoration Threshold which Tenant is entitled to receive directly under
subsection (ii) above, insurance proceeds (and condemnation proceeds to which
Tenant is entitled by the terms of Section 15.6(a)(iii) of the Lease, to the
extent provided as set forth in subsection (iii)(y) of this Agreement and
subsection (v) of Section 6(b) of the Mortgage) shall be held and disbursed by
Lender as provided in Sections 5.5(B), 5.5(C), 5.5(D) and 5.5(E) of the Loan
Agreement, as each of such subsections is in effect as of the date of this
Agreement and true, correct and complete copies of which have been delivered by
Landlord and Lender to Tenant (and Lender agrees that, upon the completion of
any Restoration (as defined in such Section 5.5(B)) in accordance with the
requirements of such subsections, any insurance restoration proceeds or
condemnation proceeds awarded to Tenant for restoration costs, as applicable,
that are remaining and held by Lender shall promptly be disbursed to Tenant);
(v) an "Impositions and Insurance Reserve", a "Replacement Reserve"
and a "Deferred Maintenance Reserve" shall be created and maintained pursuant
to, and funds shall be deposited therein and disbursements shall be made
therefrom in accordance with, Sections 6.3, 6.5 and 6.7 of the Loan Agreement,
subject to the terms of Section 7.3 of the Loan Agreement, as each of such
Sections is in effect as of the date of this Agreement and true, correct and
complete copies of which have been delivered by Landlord and Lender to Tenant;
(vi) proceeds of any Business Interruption Insurance (as defined in
the Cash Management Agreement referenced in the Loan Agreement) shall be held
and disbursed by Lender (and, to the extent applicable, disbursed by Landlord to
Tenant) in accordance with Section 2.2(e) of the Cash Management Agreement, as
such subsection is in effect as of the date of this Agreement and a true,
correct and complete copy of which has been delivered by Landlord and Lender to
Tenant; and
(vii) Tenant shall be entitled to reporting upon, and other
information relating to, the "Lessee Reserve Accounts" (as defined in the Cash
Management Agreement) on the terms described in Section 6.7 of the Cash
Management Agreement, as such Section is in effect as of the date of this
Agreement and a true, correct and complete copy of which has been delivered by
Landlord and Lender to Tenant.
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2. Tenant Not to Be Disturbed. So long as there exists no Event of Default
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(as defined in the Lease) by Tenant, if the interests of Landlord under the
Lease are transferred by reason of, or assigned in lieu of, foreclosure or other
proceedings for enforcement of the Mortgage, or Lender should otherwise come
into possession of or title to the Premises, Lender shall not join the Tenant in
summary or foreclosure proceedings unless required by law in order to obtain
jurisdiction (but in such event no judgment foreclosing the Lease shall be
sought) and Lender shall not disturb the use and occupancy of Tenant under the
Lease and shall be bound to Tenant under all of the terms and conditions of the
Lease (except as provided in this Agreement). Notwithstanding the foregoing, if
there exists an Event of Default (as defined in the Lease) that, pursuant to the
terms of Section 16.10 of the Lease, entitles Landlord to exercise remedies
solely against the Leased Property (as defined in the Lease) to which such Event
of Default relates, then, unless such Event of Default relates to the Premises
or such Section 16.10 ceases to limit Landlord's exercise of remedies solely to
the aforesaid Leased Property, the Lender shall not join Tenant in summary or
foreclosure proceedings relative to the Premises unless required by law in order
to obtain jurisdiction (but in such event no judgment foreclosing the Lease as
it relates to the Premises shall be sought) and Lender shall not disturb
Tenant's use and occupancy of the Premises under the Lease and shall be bound to
Tenant under all the terms and conditions of the Lease relating to the Premises
(except as provided in this Agreement), provided, however, that Lender, its
Affiliate or designee or any other Person that may take title to the Premises by
foreclosure, deed-in-lieu thereof, the exercise of any power of sale or
otherwise (Lender or any such Affiliate, designee or other Person, a "Successor
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Owner") shall be entitled, upon becoming the successor landlord under the Lease
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relative to the Premises, to exercise its rights and remedies under the Lease
relative to the Premises, subject to any limitations upon such rights and
remedies as may exist due to the applicability of Section 16.10 of the Lease.
3. Tenant to Attorn to Lender. If the interests of Landlord under the Lease
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are transferred by reason of, or assigned in lieu of, foreclosure or other
proceedings for enforcement of the Mortgage, or a Successor Owner should
otherwise come into possession of or title to the Premises, then Tenant shall,
at the option of such Successor Owner, (x) attorn to such Successor Owner and
perform for its benefit all the terms, covenants, and conditions of the Lease on
Tenant's part to be performed with the same force and effect as if such
Successor Owner were the landlord originally named in the Lease, or (y) enter
into a new lease relative to the Premises with such Successor Owner, as
landlord, for the remainder of the term of the Lease as it applies to the
Premises and otherwise on the same terms and conditions of the Lease, except
that in either case such Successor Owner shall not be (i) liable for any
previous act, omission or negligence of any prior landlord (including Landlord)
under the Lease; (ii) subject to any counterclaim, defense or offset which
theretofore shall have accrued to Tenant against any prior landlord (including
Landlord); (iii) bound by any previous assignment (except as expressly permitted
under the Lease), surrender, release, waiver, cancellation, material
modification or material amendment of the Lease or by any previous prepayment of
more than one month's rent, unless such modification, amendment or prepayment
shall have been approved in writing by Lender or such Successor Owner (including
in accordance with Section 22.10 of the Lease, as amended by Section 15(c)(v)
hereof); or (iv) liable for any security deposited pursuant to the Lease unless
such security has actually been delivered to such
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Successor Owner. Nothing contained in this Section 3 shall be construed to limit
(a) any right otherwise exercisable by any such Successor Owner against Tenant
or by Tenant against any such Successor Owner because of events occurring after
the date of attornment or (b) subject to the provisions of Section 6, Successor
Owner's obligation to correct any conditions that existed as of the date of
attornment and which violate Successor Owner's obligations as landlord under the
Lease. Tenant agrees to execute and deliver to any such Successor Owner such
further assurance and other documents confirming the foregoing as such Successor
Owner may reasonably request.
4. Acknowledgment of Assignment of Lease and Rents. Tenant acknowledges
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that it has received notice that the Lease and the rent and all other sums due
thereunder have been assigned or are to be assigned to Lender as security for
the Loan secured by the Mortgage. Tenant further acknowledges that it has
received notice from Lender that, from and after the date hereof, all rent and
other sums due under the Lease and payable to Landlord are to be paid directly
to Lender or its agent in accordance with the instructions therein (such notice
and any subsequent notice delivered by Lender with respect to payment of rent
under the Lease, the "Rent Payment Notice"), and Tenant agrees that it shall
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honor such Rent Payment Notice and pay its rent and all other sums due under the
Lease directly to the Lender or as otherwise required pursuant to such notice
and shall disregard any notice to the contrary received from any landlord
(including Landlord) under the Lease or any third party. Landlord irrevocably
directs Tenant to comply with the Rent Payment Notice received from Lender,
notwithstanding any contrary direction or instruction from Landlord or from any
third party and Tenant shall be entitled to rely on the Rent Payment Notice.
Tenant shall be under no duty to controvert or challenge any Rent Payment
Notice. Tenant's compliance with the Rent Payment Notice shall not be deemed to
violate the Lease. Landlord hereby releases Tenant from any claims based upon
Tenant's compliance with the Rent Payment Notice and further agrees to indemnify
and hold Tenant harmless from and against any and all loss, claim, damage,
liability, cost or expense, including, without limitation, reasonable attorneys'
fees, arising from any claim made by Landlord against Tenant based upon Tenant's
compliance with the Rent Payment Notice. Landlord shall look solely to Lender
with respect to any claims Landlord may have on account of an incorrect or
wrongful Rent Payment Notice. Tenant shall be entitled to full credit under the
Lease for any rent or other sums due under the Lease paid to Lender pursuant to
the Rent Payment Notice to the same extent as if such rent and other sums were
paid directly to Landlord. Tenant agrees that Lender shall not be liable for or
bound by any payment of rent that Tenant may have made to Landlord more than
thirty (30) days before the date such rent was first due and payable under the
Lease with respect to any period after the date of attornment.
5. Limited Liability.
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(a) The interest of Landlord in the Lease shall be or has been assigned
to Lender solely as additional security for the Loan and Lender assumes no duty,
liability or obligation under the Lease, either by virtue of said assignment,
the exercise thereof or by any subsequent receipt or collection of rental,
additional rental or any other sums due thereunder.
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(b) If Lender (or any Successor Owner) shall succeed to the interest of
Landlord, Lender (or such Successor Owner) shall have no personal liability as
successor to Landlord, and Tenant shall look only to the estate and property of
Lender (or such Successor Owner) in the Premises or the proceeds thereof
(including, without limitation, insurance and condemnation proceeds) for the
satisfaction of Tenant's remedies for the collection of a judgment (or other
judicial process) requiring the payment of money in the event of any default by
Lender (or such Successor Owner) as landlord under the Lease. No other property
or assets of Lender (or such Successor Owner) shall be subject to levy,
execution or other enforcement procedure for the satisfaction of Tenant's
remedies under or with respect to the Lease, the relationship of the landlord
and the tenant thereunder or Tenant's use or occupancy of the Premises.
6. Lender's Right to Notice of Default and Option to Cure. Tenant hereby
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agrees that, from and after the date hereof, in the event of any act or omission
by Landlord which would give Tenant the right, either immediately or after the
lapse of time, to terminate or cancel the Lease or to claim a partial or total
eviction, or abatement of rent, setoff or counterclaim not otherwise expressly
permitted by the terms of the Lease, Tenant shall not exercise any such right
until (i) it has given written notice of such act or omission to Lender; (ii)
Landlord shall have failed to cure the same within the time limits set forth in
the Lease; (iii) following the giving of such notice Lender shall not have
remedied such act or omission (x) in the case of any act or omission which is
capable of being remedied without possession of the Premises, within the cure
period available to Landlord under the Lease plus thirty (30) days and (y) in
the case of any act or omission which is incapable of being remedied without
possession of the Premises, within thirty (30) days following the date on which
possession is obtained (either by Lender or by a receiver in an action commenced
by Lender), provided Lender shall have promptly commenced action to obtain
possession and shall diligently pursue such action to completion and provided
further Lender shall promptly give Tenant notice of its intention to, and
commence and continue to, remedy such act or omission or cause the same to be
remedied.
7. Notices. Notices and other communications provided for herein shall be
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in writing and shall be delivered, mailed or transmitted by facsimile and
addressed to the parties as follows: (a) if to Lender, at c/o Merrill ▇▇▇▇▇ &
Co.; Four One World Financial Center, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇; with a copy
to Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attn:
▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq., Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇; or (b) if to Landlord at
c/o Ventas, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attn: General Counsel, Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇; with copies to
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇; ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇ ▇▇▇▇▇,
Esq., Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇; and to Barack ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn:
▇▇▇▇▇▇ ▇. Page, Esq., Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇; or (c) if to Tenant at
Kindred Healthcare, Inc., ▇▇▇ ▇▇▇▇▇ ▇/▇▇/ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attn: Chief Financial Officer; Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇; with
copies to Kindred Healthcare, Inc., ▇▇▇ ▇▇▇▇▇ ▇/▇▇/ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attn: General Counsel; Facsimile
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No.: (▇▇▇) ▇▇▇-▇▇▇▇; or (d) if to Leasehold Mortgagee at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Bank,
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: Loan
Administration-Kindred, Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇, or such other address as
such party may from time to time designate by giving written notice to the other
parties hereunder. All notices and other communications given to any party
hereto in accordance with the provisions of this Agreement shall be deemed to
have been given (x) on the fifth (5th) day after the date when sent by
registered or certified mail, postage prepaid, return receipt requested, if by
mail, (y) when delivered, if delivered by hand or courier service or (z) when
receipt is acknowledged, if sent by facsimile, in each case addressed to such
party as provided in this Section or in accordance with the latest unrevoked
written direction from such party.
8. Estoppel. Tenant hereby states, declares, represents and warrants as
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follows:
(a) That the Lease term shall expire on various dates as reflected in
the Lease, that as of the date hereof Tenant is paying rent on a current basis,
that except as may be expressly required by the terms of the Lease, no rent has
been or shall be paid by Tenant during the term of the Lease for more than one
month in advance, that the rent payable under the Lease is in the amounts
provided thereunder, and that there is no claim or basis for an adjustment
thereto;
(b) That no default on the part of Tenant exists under the Lease, nor is
there any default under the Lease that, with the giving of notice or the passage
of time or both, would constitute a default on the part of Tenant under the
Lease, in the performance of the terms, covenants and conditions of the Lease
required to be performed on the part of Tenant, there exist no defenses or
offsets to enforcement of the Lease by Landlord and that there are, as of the
date hereof, no defaults or breaches on the part of Landlord under the Lease
known to Tenant and Tenant has made no claim against Landlord;
(c) That the Lease is now in full force and effect and has not been
amended, modified or assigned and the Lease is the only agreement between
Landlord and Tenant regarding the Premises;
(d) That the Premises at the above location have been completed in
accordance with the applicable terms (if any) of the Lease, that Tenant has
accepted possession of said Premises, that it now occupies the same and is open
for business and that Tenant has not assigned, sublet (except as set forth in
Schedules 25.1.7 and 40.12 to the Lease, transferred, encumbered (except for
Leasehold Mortgages permitted under the Lease) or otherwise disposed of its
interest in the Lease and/or the Premises, or any part thereof;
(e) Tenant has no right or option of any nature whatsoever to purchase
the Premises or any portion thereof or any interest therein except as expressly
provided under Sections 14.2.1 and 16.12 of the Lease upon the occurrence of
certain casualties to the Premises or in order to cure certain defaults
affecting the Premises under the Lease and to the extent that Tenant has had or
hereafter acquires any such right or option in addition to those set forth in
Sections 14.2.1 and 16.12 of the Lease, such right or option (other than those
set forth in said Sections 14.2.1 and 16.12 of the Lease) is hereby acknowledged
to be subject and
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subordinate to the Mortgage and is hereby waived and released with respect to,
and shall not be asserted against, any Successor Owner;
(f) That the Section 16.10.1 Number (as defined in the Lease)
applicable to the Lease is, as of the Effective Date, equal to two (2);
(g) That, as of the Effective Date, a purchase option in connection
with certain defaults under the Lease is available to Tenant under Section 16.12
of the Lease with respect to no more than one (1) of the Leased Properties (as
defined in the Lease) during the term of the Lease; and
(h) That neither the Tenant Senior Secured Credit Agreement (as
defined in the Lease) and the documents evidencing and securing the loan made
thereunder nor the Exit Facility Documents (as defined in the Lease) have been
materially amended since April 20, 2001, except in the case of each such
financing pursuant to an amendment dated on or about November 28, 2001, true,
correct and complete copies of which have been delivered by Tenant to Landlord.
9. Lease Section 38.1. Until the earlier of (a) payment in full of the
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Loan or (b) the date on which, through foreclosures, trustee's sales and/or
deeds in lieu thereof, Lender ceases to hold a mortgage, deed of trust or deed
to secure debt upon any of the Leased Properties to secure the Loan (such
earlier date being referred to herein as the "Termination Date"), Section 38.1
----------------
of the Lease shall be amended to delete subsections (a) and (b) thereof.
Pursuant to the requirements of Section 38.1 of the Lease, Lender hereby agrees
(a) to permit Tenant and/or any Leasehold Mortgagee to appear by its or their
respective representatives and to bid at any sale in foreclosure made with
respect to the Mortgage; and (b) pursuant to the terms and conditions of this
Agreement, not to disturb the possession of Tenant or any successor to Tenant
of the Premises so long as there exists no Event of Default (whether by Tenant
or any such successor) under the Lease.
10. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
-------------
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE IN WHICH THE PREMISES IS LOCATED.
11. Recording. Landlord shall pay all recording and filing fees in respect
---------
to this Agreement and any agreements, instruments and documents made pursuant to
the terms hereof or ancillary hereto, as well as any and all taxes and fees
which may be due and payable on the recording of this Agreement and any taxes
and fees hereafter imposed on this Agreement.
12. Miscellaneous. In the event of any conflict or inconsistency between
-------------
the provisions of this Agreement, the Loan Agreement (and related documents) and
the Lease, the provisions of this Agreement shall govern. Lender's enforcement
of any provision of this Agreement or the Mortgage shall not entitle Tenant to
claim any interference with the contractual relations between Landlord and
Tenant or give rise to any claim or defense against Lender with respect to the
lawful enforcement of such provisions. The provisions of this Agreement are
binding upon and shall inure to the benefit of the heirs, successors and assigns
8
of the parties hereto (including any Leasehold Mortgagee or other Person that
succeeds to the interest of Tenant under the Lease by foreclosure of a Leasehold
Mortgage or assignment-in-lieu thereof in accordance with the terms and
conditions of the Lease); provided however, that the interest of Tenant under
this Agreement may not be assigned or transferred, nor the Premises sublet,
except as expressly permitted in the Lease. Landlord agrees that this Agreement
satisfies any condition or requirement in the Lease relating to the granting by
Tenant of a subordination agreement relative to the Mortgage and Assignment of
Leases, in each case as the same relate to the Premises. Tenant agrees that this
Agreement satisfies any conditions or requirement in the Lease relating to the
granting of a non-disturbance agreement relating to the Mortgage and Assignment
of Leases, in each case as the same relate to the Premises. If any portion of
this Agreement shall be held invalid or inoperative, then all of the remaining
portions shall remain in full force and effect, and so far as is reasonable and
possible, effect shall be given to the intent manifested by the portion or
portions held to be invalid or inoperative. This Agreement may be executed in
any number of separate counterparts, each of which shall be deemed an original,
but all of which, collectively and separately, shall constitute one and the same
agreement. The headings of the sections, paragraphs and subdivisions of this
Agreement are for the convenience of reference only, are not to be considered a
part hereof and shall not limit or otherwise affect any of the terms hereof.
Whenever the singular or plural number, masculine or feminine or neuter gender
is used herein, it shall equally include the other. No change, amendment,
modification abridgement, cancellation or dischange hereof or of any part
hereof, shall be valid unless agreed to in writing by the party against whom
enforcement of any waiver, change, modification, abridgement, cancellation or
discharge is sought. Lender represents that Lender has full authority to enter
into this Agreement and Lender's entry into this Agreement has been duly
authorized by all necessary actions.
13. Lease Section 10.3/Capital Alterations Financing; Lease Section 14.2;
--------------------------------------------------------------------
Lease Section 26.1(j). Landlord and Tenant agree that, notwithstanding anything
---------------------
to the contrary contained in Section 10.3 of the Lease, until the Termination
Date, Tenant shall not be obligated to request, and shall not request or accept,
from Landlord any financing of any Capital Alteration (as defined in the Lease)
with respect to the Premises. Relative to Section 14.2 of the Lease, in the
event Landlord accepts an offer to purchase the Premises made by Tenant pursuant
to Section 14.2.1 of the Lease, Landlord covenants to Tenant that it will cause
Lender's Mortgage and Assignment of Leases encumbering the Premises to be
released contemporaneously with the closing of such purchase, provided that
Lender shall not be obligated to grant such release unless and until Landlord
satisfies the conditions thereto set forth in the Loan Agreement. Until the
Termination Date, Section 26.1(j) of the Lease shall be amended by adding
thereto, after the words "If Lessor is a Ventas Lessor," the words "or any
Person (including a Facility Mortgagee or its Affiliate) claiming its interest
as lessor under the Lease through any foreclosure of a Facility Mortgage or deed
in lieu thereof."
14. Health Care Provisions. Tenant hereby agrees, covenants, represents
----------------------
and warrants with and to Lender as follows:
9
(a) (i) All material certificates, permits, licenses and approvals,
registrations and authorizations required for the operation and use of the
Premises as a skilled nursing facility by all federal, state and local
governmental or quasi-governmental agencies, including, without limitation,
certificates of need, health care and operating licenses, all certificates,
permits, licenses and approvals, registrations, authorizations and
certifications required to obtain reimbursement as a provider of services under
all applicable Legal Requirements (as defined in the Lease) (collectively, the
"Health Care and Operating Licenses") are in full force and effect, are held by,
----------------------------------
or are in the name of, Tenant or its Affiliate (as defined in the Lease); (ii)
there are no proceedings pending or, to Tenant's knowledge, threatened by any
federal, state or local governmental or quasi-governmental agency to modify,
revoke or suspend any of the Health Care and Operating Licenses; and (iii) to
the best of Tenant's knowledge and belief, all Medicaid and Medicare cost
reports filed by or on behalf of Tenant since July 1, 2000 with respect to the
Premises are materially accurate and complete and not misleading in any material
respect.
(b) Simultaneously with delivery thereof to Landlord under the Lease,
Tenant shall deliver to Lender a copy of any notice given to Landlord under
Section 8.1 or Section 26.2 of the Lease.
(c) Simultaneously with delivery thereof to Landlord under the Lease,
Tenant shall deliver to Lender a copy of any monthly consolidated survey
deficiency summary report delivered to Landlord under Section 26.1(i)(iv) of the
Lease regarding any alleged material deficiency with respect to the Premises
under any survey, citation or report prepared or issued by any federal, state or
local governmental or quasi-governmental agency that surveys compliance with the
Health Care and Operating Licenses, including, without limitation, Medicaid and
Medicare certification requirements.
15. Lease Article XXII/Leasehold Mortgages.
--------------------------------------
(a) Lender acknowledges that, as of the Effective Date, "Leasehold
Mortgagee," as such term is used in the Lease, means ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Bank
(formerly The Chase Manhattan Bank, successor-by-merger to ▇▇▇▇▇▇ Guaranty Trust
Company of New York) ("▇▇ ▇▇▇▇▇▇ Chase"), as Senior Collateral Agent under that
---------------
certain $120,000,000 Credit Agreement, dated as of April 20, 2001, and ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, as Second Priority Collateral Agent under that certain Credit Agreement
Providing for the Issuance of $300,000,000 Senior Secured Notes Due 2008, dated
April 20, 2001, and "successors and assigns" as used herein shall include ▇▇
▇▇▇▇▇▇ Chase, as Senior Collateral Agent, or ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, as Second Priority
Collateral Agent, if it succeeds to the interest of Tenant under the Lease by
foreclosure of a Leasehold Mortgage or assignment-in-lieu thereof in accordance
with the terms and conditions of the Lease.
(b) The rights and remedies of Leasehold Mortgagee under the
Leasehold Mortgages shall be subject to the terms of the Lease and this
Agreement.
(c) Until the Termination Date:
10
(i) the introductory clause of the second sentence of Section 22.4
of the Lease shall be amended by deleting therefrom the words "after the time
such notice" and substituting in their place the words "after the time such a
notice of default (or such a notice of termination, if such notice of
termination results from a default on account of which the Leasehold Mortgagee
has not previously, pursuant to this Section 22.4, been given notice and an
------------
opportunity to cure)", and Section 22.4 of the Lease shall be further amended by
adding to the end thereof the following additional sentence: "The provisions of
this Section 22.4 shall not limit the rights of a Leasehold Mortgagee under
------------
Section 22.7";
------------
(ii) Section 22.6(b) of the Lease shall be amended by adding to the
end thereof the following additional sentence: "For all purposes of this Section
-------
22.6(b) and the other provisions of this Section 22.6, in the event of any
------ ------------
Separate Lease under Section 22.7 below that is proposed to be entered into with
------------
a tenant other than the Leasehold Mortgagee or its Affiliate, such proposed
tenant shall be subject to consent by Lessor, or approval by Facility
Mortgagee(s), on the same terms and conditions as if the aforesaid proposed
tenant was the purchaser at a sale and purchase of Tenant's leasehold estate and
rights under this Lease at a Leasehold Mortgage foreclosure sale as provided
under this Section 22.6";
------------
(iii) Section 22.7(a) of the Lease shall be amended by adding to the
end thereof the words "and, if the proposed tenant under such Separate Lease is
a Person other than the Leasehold Mortgagee or its Affiliate, such proposed
tenant shall be consented to by Lessor and approved by Facility Mortgagee(s) as
required pursuant to Section 22.6(b) hereof";
--------------
(iv) Section 22.7(d) of the Lease shall be amended by adding to the
end thereof the words "and Lessor agrees that, in the case of any non-monetary
defaults of Tenant, Leasehold Mortgagee or its designee shall have thirty (30)
days to remedy the non-monetary defaults of which it has been notified,
commencing upon the date of execution and delivery of such Separate Lease"; and
(v) Section 22.10 of the Lease shall be amended (x) by adding to the
end of the first sentence thereof the words "and are reasonably approved by any
Facility Mortgagee(s) (which approval shall be deemed to have been granted by a
Facility Mortgagee if (x) the correspondence from Tenant to such Facility
Mortgagee requesting such approval contains a bold-faced, conspicuous legend at
the top of the first page thereof stating that "IF YOU FAIL TO RESPOND TO OR TO
EXPRESSLY DENY THIS REQUEST FOR APPROVAL IN WRITING WITHIN FIFTEEN (15) BUSINESS
DAYS, YOUR APPROVAL SHALL BE DEEMED GIVEN," and (y) such Facility Mortgagee
fails to notify Tenant of its objection(s) to a proposed amendment within
fifteen (15) Business Days after receipt by it of the final draft of such
proposed amendment)" and (y) by restating the last sentence thereof to read as
follows: "All expenses incurred by any Facility Mortgagee in connection with any
such amendment shall be paid by Lessor, and all other reasonable expenses
incurred by Lessor in connection with any such amendment shall be paid by
Tenant."
16. Lease Amendment. Landlord and Tenant agree that, until the Termination
---------------
Date, the Lease shall not be materially amended by Landlord and Tenant without
the prior written consent of Lender, which consent may be granted or withheld by
Lender in its sole
11
discretion. Nothing contained in this Section 16 shall modify Lender's
obligations, as described in Section 15(c)(v) of this Agreement, relative to
amendments of the Lease that are proposed to be entered into pursuant to Section
22.10 of the Lease.
17. Lease Section 40.17/New Master Leases. With respect to Section 40.17
-------------------------------------
of the Lease, Landlord and Tenant agree that, until the Termination Date, unless
Lender, in its sole discretion, agrees in writing, none of the Leased Properties
(including, without limitation, the Premises) that remain under the Lease may be
included in any "New Master Lease" formed pursuant to Section 40.17 of the
Lease.
18. Lease Section 40.18/Combination of Leases. With respect to Section
-----------------------------------------
40.18 of the Lease, Landlord and Tenant agree that, until the Termination Date,
unless Lender, in its sole discretion, agrees in writing, none of the Leased
Properties that remain under the Lease (including, without limitation, the
Premises) may be combined with any other Combined Lease of other Master Lease
Leased Properties pursuant to Section 40.18 of the Lease.
19. Effective Date. This Agreement shall be effective as of the date
--------------
hereof.
[Signature Page Follows]
12
IN WITNESS WHEREOF, the parties hereto have executed these presents the day
and year first above written.
TENANT:
KINDRED HEALTHCARE, INC., a Delaware
corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
---------------------------------
Title: Senior Vice President and
--------------------------------
Chief Financial Officer
--------------------------------
KINDRED HEALTHCARE OPERATING, INC., a
Delaware corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
---------------------------------
Title: Senior Vice President and
--------------------------------
Chief Financial Officer
--------------------------------
LANDLORD:
VENTAS FINANCE I, LLC, a Delaware
limited liability company
By: /s/ T. ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Name: T. ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Title: Executive Vice President
--------------------------------
LENDER:
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE LENDING, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Title: Vice President
--------------------------------
13
STATE OF Kentucky )
ss.:
COUNTY OF Jefferson )
On December 7, 2001, before me, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, personally appeared ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇▇▇, the Senior VP & CEO of KINDRED HEALTHCARE, INC., a Delaware
corporation, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me all that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the instrument the
person, or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Notary Public
My commission expires: May 15, 2005
-------------
[Notarial Seal]
14
STATE OF Kentucky )
ss.:
COUNTY OF Jefferson )
On December 7, 2001, before me, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ personally appeared ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇▇, the Sr V.P. & CFO of KINDRED HEALTHCARE OPERATING, Inc., a Delaware
corporation, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me all that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the instrument the person
or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Notary Public
My commission expires: May 15, 2005
[Notarial Seal]
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇ )
-------------------
ss.:
COUNTY OF NEW YORK New York )
------------------
On December 11, 2001, before me, ▇▇▇▇ ▇▇▇▇▇▇▇▇, personally appeared T. ▇▇▇▇▇▇▇
▇▇▇▇▇, who is personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he executed the same in his authorized
capacity, as the V.P. of VENTAS FINANCE I, LLC, a Delaware limited liability
company, and that by his signature on the instrument the aforesaid limited
liability company, executed the instrument.
WITNESS my hand and official seal.
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------
Notary Public
[Notarial Seal]
▇▇▇▇ ▇▇▇▇▇▇▇▇
Notary Public, State of New York
No. 4951918
Qualified in Nassau County
Commission Expires June 5, 2003
16
STATE OF NEW YORK New York )
(S):
COUNTY OF NEW YORK New York )
On December 11, 2001, before me, ▇▇▇▇ ▇▇▇▇▇▇▇▇, personally appeared ▇▇▇▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, the V.P. of ▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE LENDING, INC., a Delaware
corporation, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me all that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the instrument the person,
or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------
Notary Public
[Notarial Seal]
▇▇▇▇ ▇▇▇▇▇▇▇▇
Notary Public, State of New York
No. 4951918
Qualified in Nassau County
Commission Expires June 5, 2003
17